Chambers Company sells glass vases at a wholesale price of $2.50 per unit. Variable cost is $1.75 per unit. Chambers' fixed costs are $6,500 per month. Chambers is currently selling 15,000 units per month. If Chambers wants to increase operating income by 20%, how many more units, over and above the current volume, must they sell? (Please round to nearest whole number.)

Question

Quizplus · Accepted Answer

C) Calculations:
($2.50 - $1.75) × 15,000 = $11,250
$11,250 - $6,500 = $4,750
$4,750 × 1.2 + $5,700
($5,700 + $6,500)/ $0.75 = 16,267
16,267 - 15,000 = 1,267

Chambers Company Sells Glass Vases at a Wholesale Price of $2.50